CalOptima Health

Non-Profit Healthcare Academy

In-person Financial Resiliency Workshop
Welcome

Danielle Cameron Jasmine Awadallah

Director Program Manager
Program Development Program Development
Medi-Cal and CalAIM Medi-Cal and CalAIM

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 2

 Purpose:
Nonprofit • Build CBO capacity to serve populations
experiencing health disparities
Healthcare
Academy • Provide technical assistance to CBO to partner
with the healthcare sector
(NPHA)
• Position CBO as potential service provider to
enhance existing services

CalOptima Health| NPHA| November 2023 3

2024 – 2025 NPHA Cohort

 Advance OC  Mercy Health

 Afghan American Muslim Outreach  Orange County Children’s
Therapeutic Arts Center
 American Academy of Pediatrics –
Orange County  Pacific Islander Health Partnership
 Pear Suite
 Beyond Blindness
 Project Self Sufficiency
 Cancer Kinship  Recovery Road, Inc.
 Casa Morelos  Sacred Path Indigenous Wellness
 Green – MPNA Center
 Kalaya’s Destiny  The Kennedy Commission
 Learning Rights Law Center  Unidos South OC

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

NPHA Support Team & Trainers

Meredith Hennessy, MUP Juanita Ortiz, MBA Elizabeth Warren

Consilience Group Consilience Group Consilience Group

Susette Aguiar-Possnack Susan Donovan Nish Samant

APT Training Quantified Ventures Quantified Ventures

Nonprofit Healthcare Academy Retreat| September 2024

5
Overall Non-Profit Healthcare Academy Timeline

Event Date
Kickoff & Orientation(1.5 hours) Complete
Academy Retreat (1.5 days) Complete
Technical Assistance Sessions Complete
Logic Model Due Complete
Financial Resiliency Virtual Kick-off Complete
In-Person Financial Resiliency Workshop January 22, 2025
Financial Resiliency Technical Assistance Sessions January 27 – February 2025

Graduation March 4, 2025

8:30 am – 12:00pm

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

 9:00 am Welcome from CalOptima
9:10 am CalAIM Refresher
9:20 am Case Study Debrief
9:30 am Sources of Revenue in Healthcare for NPOs

Today’s 10:30 a.m.

10:45 am
Break
Foundations in Financial Management
Agenda 11:45 am Working Lunch : CalOptima Funding Opportunities
12:45 pm Philanthropic vs. Earned Revenue
1:45 pm Building a Financial Model for Programs and Services
2:45 pm Putting It All Together
3:00 pm Break
3:15 pm Making Your Case with Confidence and Clarity
4:15 pm Wrap Up and Next Steps

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

CalAIM Refresher

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

• Largest state Medicaid program in the nation
• Provides free or low-cost health coverage for low-income
California residents
• 1/3 of the state’s population is enrolled in Medi-Cal
• Run by the California Department of Health Care Services
(DHCS) and administered by managed care organizations
• Eligibility:
• Income is 138% below poverty level
• Blind
• Disabled
• Pregnant
• In a skilled nursing or intermediate care
• Refugee status
• Caretaker of an age-eligible child
• Have been screened for breast and/or cervical cancer

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

• A transformation initiative to make Medi-CAL more
equitable, coordinated, and person-centered.

• Goals include:
• Address California’s physical and mental health
needs by providing improved comprehensive and
personalized care
• Improve and integrate care for Californians by
standardizing, simplifying and streamlining how
members across the state access health care, no
matter where they live.
• Be a catalyst for equity and justice by providing
new services designed to address racial and ethnic
disparities
• Work together to build a healthier state by working
with a broad network of partners, including health
plans, providers, and CBOs.

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Prioritizing the Whole Person

Whole-Person Care
Social Services Physical Health
employment assistance, medical services The coordination of health,
housing assistance,
justice, food assistance,
enrollment assistance
public health and
prevention behavioral health, and social
services in a patient-
centered manner with the
goals of improved health
outcomes and more efficient
Behavioral and effective use of
Health
mental health care
resources.
substance abuse
treatment
Source: CPH, SNI
Enhanced Care Management Services

Referrals to
Community
Outreach &
Engagement
 Medi-Cal benefit for members with
highest, complex health needs
 Members have a single lead care manager
Patient and Care Management
Family Supports Plan who coordinates care and services
among the physical, behavioral, dental,
developmental and social services delivery
Comprehensive Enhanced Care
Transitional Care Coordination systems

Health Promotion

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

 Who is eligible?

ECM Populations of Focus (POFs) Adults Children &

Youth
1. Individuals and families experiencing homelessness

2. Individuals at risk for avoidable hospital or ED utilization

3. Individuals with serious mental illness or substance use disorder

4. Individuals transitioning from incarceration

5. Adults living in the community and at risk for long term institutionalization

6. Adult nursing facility residents transitioning to the community

7. Children and youth enrolled in California Children’s Services (CSS) with needs beyond CSS
8. Children and Youth involved in child welfare

9. Birth Equity

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

 Community Support Services (CS) – In Lieu Of

Housing Support Home-Based Services

 Non-medical services that help • Housing Transition Navigation • Respite Services

Services • Community Transition
improve Medi-Cal members' overall
• Housing Deposits Services/Nursing Facility
health by addressing social drivers of Transition to Home
• Housing Tenancy and
health. Sustaining Services • Personal Care and Homemaker
services
Post-Acute Care Placement
• Home Modifications
• Short-term post hospitalization
housing • Meals/Medically Tailored Meals
• Recuperative Care (Medical Additional Services
Respite)
• Day Habilitation
• Nursing Facility
transition/diversion to assisted • Asthma Remediation
living facilities • Sobering Centers

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

ECM Birth Equity
Services Population of Focus
 Aims to address known, underlying risk  Adults and youth that are pregnant or are
factors for disparities in health and post partum up to 12 months); and
birth outcomes in specific populations
 Are subject to racial and ethnic
 Doula services include personal support to disparities as defined by California public
pregnant people and their families health data on maternal morbidity and
throughout the pregnancy, labor, childbirth mortality
and postpartum experience.

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Community Health Workers

 Frontline, non-licensed public

health workers with lived
Education Navigation
experience who help community
members access healthcare and Promotores
social services Navigators
Community Health Reps
Violence Pevention
 ECM Services can include CHW professionals

services (often integrated into care

team) Advocacy Assessments

 Members currently enrolled in ECM

cannot simultaneously receive CHW
services.

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Financial Resiliency

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Introduction to NPHA QV Team Members

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Introduction to Quantified Ventures

Quantified Ventures (QV) is a

certified B Corporation and
woman-owned business, that
partners with pioneering
organizations to design, capitalize,
and scale bold, investible solutions
that improve the wellbeing of
people and the planet.
Since 2021, QV has partnered with a variety of
organizations, ranging from large multi-county
Managed Care Plans (MCPs) to small, rural,
Community Based Organizations (CBOs), to
support CalAIM implementation.

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Why Focus on Financial Resiliency ?

Increasing opportunities to seek funding from healthcare

Variety of funding types that require different / new financial

management skills

Healthcare partners value strong financial stewardship

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Goals of the Financial Resiliency Curriculum

To equip non-profit To explore dynamics

organizations in the unique to current the
To understand how
Healthcare Academy with current healthcare
money flows through
a foundational landscape – many local
your organization and
understanding of core and online courses are
ways basic financial
financial concepts that available that dive into
analysis can guide
foster strategic thinking traditional non-profit
business decision-making
and improve operational accounting and
sustainability budgeting

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Case Study Debrief

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Pre-work Debrief: Case Study Reflections

Pre-read Case Studies of current

CalOptima Health partners, How did these
included: organizations leverage
 Early CalAIM contracted providers different types of revenue
Latina Health Access and Thomas – grants/philanthropy,
House Family Shelter vendor, provider –
 NPHA Cohort 1 participants Vital together to achieve short-
Access Care Foundation and Give and long-term goals?
for a Smile

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

 Module 1: Sources of
Revenue in Healthcare for
Non-Profit Organizations

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

  Assess the range of revenue that is
available in Healthcare
Module 1
 Understand how types of revenue differ
Objectives
and influence strategy & operations for
an organization
 Identify funding opportunities for your
organization that are worth pursuing

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 How Healthcare Can Pay You
Financial relationships with payors in Healthcare (insurance plans, hospitals,
health foundations, etc.) can take many forms. We want to highlight 3
common ones here that may apply to your organization:

Grants & A “grantee” is given a pot of money to accomplish a

Philanthropy specific, stated goal

A “vendor” provides a specific service or product to a

Vendors “client”

Contracted A “provider” provides a particular service to a health Plan’s

Providers “member population”

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Grants & Philanthropy

Examples

• Money for an organization that does not • Grant opportunities from

need to be paid back governments, foundations, or
• Often acquired through an application or corporations
fundraising initiative aimed at a specific
goal/initiative • Donations from philanthropists
• Can come from many sources including (e.g. MacKenzie Scott, Melinda
government, health foundations, Gates)
corporate sponsors, and private
individuals • Fundraising drives, such as
holiday mailers or community
canvassing
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025
 Grants & Philanthropy

Advantages Challenges

• Most common and frequent type of non-profit • Funding is often short-term (1-2year) leading
funding to perpetual fundraising cycles / costs
• Non-profits can tap into multiple sources to • Often unpredictable for planning (“feast or
meet their financial needs famine”)
• Robust network of support for non-profits that • Inherently unsustainable—focus is on
can be tapped into to help with grant writing stretching this funding to the next
and fundraising application/round
• Once awarded, funding is typically guaranteed • Funds are commonly restricted to certain uses
if money is spent on allowable expenses and require diligent tracking

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 DHCS CalAIM Grant Opportunities

 The Department of Health Care

Services (DHCS) - the state
DHCS Funding Opportunities in PATH based on
organization that manages Medi-Cal Managed Care Plan Contracting Status1
and CalAIM

 The Providing Access and

Transforming Health (PATH)
initiative is $1.85 billion of funding to
enable community-based
organizations to participate in the
Medi-Cal program with targeted
support

1. PATH Funding and Engagement Benefits Guide

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 DHCS PATH Grant Programs for CBOs1

1. PATH TA Marketplace – A one-stop shop website where entities can access free
technical assistance services from curated and approved vendors

2. PATH CITED – CITED funds are awarded to help organizations increase their
ECM/Community Support provider workforce; modify, purchase, or development IT systems to
support ECM/CS delivery; conduct outreach and engage with underserved populations; and
address other ECM/CS investments needed to successfully participate in Medi-Cal

3. PATH CPI – Collaborative planning initiatives that operate at the county or regional level and
are composed of eligible entities working together to identify, discuss, and resolve implementation
issues and identify how PATH/CalAIM funding initiatives may be used to address gaps of care in
the area

1. PATH Funding and Engagement Benefits Guide

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Vendor Relationship Funding

Examples
• Money earned for providing a specific
service or product that the paying
• A physician group pays an
organization does not have in-house
outside organization to train its
• Products and services may be provided to
new hires on first aid and CPR
members, patients, or staff
• Specifics of product of service to be
• A hospital engages a local CBO to
provided are agreed upon prior to
help engage multi-visit patients
services rendered
• Hospitals, health plans, and government
• A dentist’s office hires a
agencies are the most common entities
marketing company to place
that seek out vendors for their needs
coupons on doors in the area

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 Vendor Relationship Funding

Advantages Challenges

• Deepens business relationships and can be ‘a • High competition – often there are many
foot in the door’ to more additional funding or potential vendors for a specific service or
contracts product
• A way to earn revenue for typical CBO • Long sales cycle and contracting process
activities – get paid to expand your mission
• Dependent on concentrated sources: there
• An avenue to expand brand presence in the may only be a few payors in a specific
community and market additional services geography
• Can be sustained over the long-term as long • Requires continuous demonstration of
as both parties see value outcomes and results

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 32

Contracted Provider Funding

• Money earned for rendering services to a Examples

health plan’s Member population as part
• A hospital contracts with a
of the Healthcare system
specialty surgeon practice to see
• Amount of revenue driven by number of
patients onsite a few days a week
services provided
• Members are seen as patients or clients • A health plan contracts with a
and may need to be referred in to be counseling practice to provide
eligible for medical reimbursement (i.e. cognitive behavioral therapy for
payment) its members
• Health plans or government agencies
maintain a contracted network and • A health plans contracts with a
typically require specific healthcare billing local food bank to provide meal
forms to receive payment boxes to its members

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 Contracted Provider Funding

Advantages Challenges

• Could be a way to earn revenue for typical • Lengthy and complex contracting process
CBO activities – get paid for doing the type of • Quality improvements to retain plan contracts
work you already do can be costly or time-consuming
• Opportunity for ongoing and more predictable • Additional obligations to storing health data
revenue can be administratively burdensome
• Built-in path to scale services to a larger • Liability/malpractice risks and other specialized
portion of those in need knowledge (e.g. billing) is needed
• Potential to strengthen standing in community • Payment lag can be up to three months after
and public perception of the organization providing service

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Module 1 Exercise

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Breakout Groups Assessable
 Select a breakout group based on the type of service below you are
most interested in working through as an example throughout today’s
modules
 You will stay with these groups all day and use the work you start
here on your deliverable for this section of the NPHA

Community Health Worker

Enhanced Care Management
Services Non-Contracted Provider
Access to a single Lead Care
Preventive health services to Services
Manager who provides
prevent disease, disability, and Can be any number of services
comprehensive care
other health conditions or their for groups that want to focus on
management and coordinates
progression; to prolong life; and grants/philanthropy and vendor
health and health-related care
promote physical and mental opportunities.
and services.
health and well-being.

Nonprofit Healthcare Academy | In Person Finance Workshop | January 2025 36

Small Group Discussion: Type of Revenue
Scenario:
Directions
• Your organization has been informally providing
_____________ services to clients of existing
• 20 minutes: Within
programs
your tables, discuss
• You have been put in charge of exploring way to the questions
formalize and expand these services below
Discussion Questions:
• What types of revenue could you pursue to • Identify a notetaker
support expansion of _____________ services? and prepare to
• What would be the benefits and challenges of present 2-3
pursuing each revenue type? minutes summary
of key themes and
recommendation
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025
15 Minute Break

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

38
 Module 2: Foundations in
Financial Management

39
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025
  Identify basic financial management
terms and processes
Module 2
 Understand your organization through a
Objectives business lens and related terminology
 Be able to identify the true cost of
doing business / providing a service

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 40

Building a Financial Glossary

Revenues Costs Net Change

The amount that needs to The amount remaining after

Money generated from be paid or spent to obtain all costs are subtracted from
normal business operations. or operate something. It is revenues. Can be a negative
It is typically shown as the typically shown in the number. It is typically shown
top line in an income middle line in an income as the bottom line in an
statement statement income statement
Synonyms: Gross Income, Synonyms: Expenses, Synonyms: Bottom-Line,
Top-Line, Earnings, Inflows Expenditures, Outflows Net Revenue, Profit (Loss)

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Revenue Considerations
Revenue
Trends based on revenue type Why its important
consideration
Reimbursement / • Philanthropic / Grant funding is often • Impacts an organization’s
Payment Timing pre-paid – in whole or in part ability to cover costs and
The amount of time • Provider contracting payments are continue to provide
between when a paid after costs are incurred services
product or service is • Vendor contracting payments can be • Especially important for
rendered and when negotiated but typically involve some smaller organizations
payment is received portion of payment after services are without significant cash on
delivered hand or established credit
lines

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Revenue Considerations
Revenue
consideration Trends based on revenue type Why its important

Funding • Philanthropic / Grant funding is often Unrestricted revenue

Restrictions limited and can only be used on provides significantly more
How an allowable expenses flexibility to organizations in
organizations is • Unrestricted philanthropic fundings are pursuing its mission
allowed to use the highly coveted and hard to come-by
revenue it receives • Revenue earned through vendor or
provider contracting can typically be
used in any way deemed necessary by
an organization

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Projecting As a non-profit, your primary focus
Costs may not be financial. However, it is
essential that you can understand
your true cost of doing business.

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

Start-up vs. Operating Costs

Start-up Costs: Initial Examples

investments or expenses an Cost Start-up? Operating?
organization must make to Laptops and phones
launch a new product or service for new employees
Cell phone service for
company phones
Operating Costs: Costs A company van to
travel to events
incurred by an organization to Van fuel and
function on a day-to-day basis maintenance costs
Printed flyers for
community
advertising

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 45

Fixed vs. Variable Costs

Fixed Costs: Costs that do not Examples

change regardless of an
Cost Fixed? Variable?
organization’s production
Monthly payment on a
volume, such as monthly rent leased company car
or internet service. Water bill for a local
soup kitchen
Cardboard boxes for
Variable Costs: Costs that shipping goods
vary in proportion to the Office space rent
volume of goods/services that Staff salaries
an organization produces, such (including overtime)
as vehicle fuel or food costs.

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 46

Direct vs. Indirect Costs

Direct Costs: Costs that can Examples

be directly linked to the
Cost Direct? Indirect?
creation of a product or service
Office supplies
Groceries for food
Indirect Costs: Costs that boxes
cannot be directly linked to Internet costs for a
brick-and-mortar store
the creation of a product or Marketing and
service but are required for the advertising costs
organization to function Driver compensation
(sometimes referred to as for a delivery service
Overhead)

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 47

Module 2 Group Exercise

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 48

Small Group Discussion: Financial Foundations

Scenario: To begin your new service offering, you

Directions
think you will need at least 2 direct service staff
(CHWs/Lead Care Managers/Other) @ $40,000 annual
• 20 minutes: Within
salary each to serve 400 individuals.
your tables, discuss
Discussion Questions: the questions
 What other costs might you incur to launch and below
operate the new/expanded program?
 For each cost you identified, which are one-time • Identify a notetaker
start-up costs? Which are ongoing? and prepare to
 Based on the total number of clients served, which
present 2-3
costs are fixed? Which are variable? minutes summary
of key themes and
 How much funding would you need to start the
recommendation
program? How much to operate in the first year?
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 49
 Module 3: Grant Revenue
vs. “Earned” Revenue

50
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025
  Understand what earned revenue is and
Module 3 how it differs from philanthropy
Objectives
 Increase awareness of the management
needs to support earned revenue

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 51

Earned Revenue vs. Philanthropic Revenue

Philanthropic Revenue
Earned Revenue
(sometimes called Contributed Revenue)

 Revenue provided to support a  Revenue tied to delivery of a specific

specific organization or program product or service
 Common examples include  Common examples include
donations, fundraising proceeds, membership dues, ticket sales,
and federally funded or private advertising income, program fees,
foundation grant funds merchandise fees
 Includes healthcare Grant and  Includes healthcare Vendor and
Philanthropy (see Module 1) Contracted Provider relationships
(see Module 1)

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 52

The Same Intervention Supported by Earned
vs. Philanthropic Revenue

Philanthropic Revenue Earned Revenue

(sometimes called Contributed Revenue)

 ABC Org receives a $500,000 grant  ABC Org is contracted as a vendor

from their local hospital for their local hospital to provide
 ABC Org to hires and deploys CHW services to patients being
community health workers discharged
 ABC Org receives this money as  ABC Org to hires and deploys
long as they use the funding for the community health workers
intended purpose  ABC Org receives payment for each
patient that receives services

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 53

 “Earned” Revenue – Core Elements
To prepare to pursue Earned Revenue, an organization should consider:

What is involved in
What is the product making the product
or service? or providing the
service (the cost)?

How are you / could

Who is your
you be paid for that
“buyer”?
product or service?

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 54

Common Healthcare ”Buyers” and Their
Interests
Typical Social Care Influenced
Healthcare Audience Population of Interest
Outcomes of Interest

People who have their Reduced short-term healthcare costs,

Medicaid Managed Care
insurance (members) – improved engagement with members,
Plans
typically low-income increased services quality
Individuals who are frequently 30-day hospital readmissions, reduced long-
Large Hospitals/Health admitted or visit the ER stay patients (patients staying beyond
Systems Individuals who were recently medical necessity), connections to
discharged community-based care/social services
Physician Practices / Quality measure performance, reduced
Patients receiving primary care
Community Health avoidable hospital stays, connections to
from their offices
Centers other community-based care/social services
People who have their Member Satisfaction and Retention, New
Medicare Managed Care
insurance (members) – Member Enrollment, Quality measure
Plans
typically, but not always, 65+ performance

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 55

Organizations have multiple funding needs when
starting new earned revenue service lines
Organization enters Organization
into earned revenue staffs program Organization achieves
agreement and incurs costs sustainable capacity

time 

Client or buyer pays organization based on

services provided

One time start-up Operational start-up 2- to 4-month cash flow delay

Physical plant, technology Operational inefficiency inherent Time delay between incurring costs and collecting
investments, etc. in starting a new program revenue associated with those costs

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 56

 Ongoing management: Services rarely roll
out as initially envisioned, close monitoring
Organizational and quick adjustments are needed to adapt
Capabilities to
Support
Earned
Accountability: Clients and payors will
Revenue expect to see ongoing reporting / data
demonstrating intended outcomes / results

Sustainability: Prior to launching an earned

revenue service, organizations should know
the conditions that need to be true to
achieve financially sustainability

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 57

Module 3 Exercise

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 58

Small Group Discussion: Preparing for
Different Types of Revenue
Scenario: You have decided to further pursue development of
Directions
your new program through a grant/philanthropy approach and at
least one earned revenue approach.
• 20 minutes: Within
Discussion Questions:
your tables, discuss
the questions
 How would you make the case for your program to
grant/philanthropy funders? below
 Identify a possible earned revenue opportunity for your
program. Who would you “sell” to and how would you make the • Identify a notetaker
case? and prepare to
 What questions would you ask to assess your organization’s present 2-3
readiness to pursue the identified earned revenue opportunity? minutes summary
of key themes and
recommendation
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 59
 Module 4: Building a
Financial Model for
Programs and Services

60
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025
  Understand how to set up and interpret
Module 4 basic financial models
Objectives  Explain how financial projections can
help with strategic decision-making and
ongoing program management

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 61

Setting Up a Basic Financial Model
You are opening a lemonade stand in the neighborhood for charity. The table and pitcher cost $1000
and a business license to operate is $250 per quarter. It costs you $1.50 in ingredients per glass
served. If you price a glass at $2, you expect to serve on average around 10 people per day (300
per month) and double this number during the summer months. You are not planning to take a
salary for your efforts here. How much do you expect to donate to charity after 1 year?

Q1 Q2 Q3 Q4 Total
Revenue $1800 $1800 $3600 $1800 $9000
Clients served 900 900 1800 900 4500
Expenses
Variable Costs (these should $1350 $1350 $2700 $1350 $6750
change as output changes)
Fixed Costs (these should stay $1250 $250 $250 $250 $2000
consistent as output changes)
Net Change ($800) $200 $650 $200 $250

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 62

 Dealing with Budget Uncertainty
Look Back to Look Ahead Developing Forecast Scenarios

1. Review Past Budgets & Data Optimistic

The unlikely scenario where everything
 Identify trends in revenue and expenses goes right. Revenues exceed expectations
 Assess variances in past budget vs. actuals and/or costs are lower. These scenarios
rarely happen without outside forces acting.
2. Forecast Revenue
 Identify revenue streams from different
Baseline
sources This is the most likely scenario. Revenue
 Project income realistically from these sources and expenses are grounded in historical
basis and factor in likely expectations
 Plan for uncertainty through scenarios
3. Estimate Expenses
Conservative
 Categorize costs into fixed and variable Revenue projections should only include
 Include contingencies for unallocated costs flows that are certain. Costs may grow
disproportionately. Is the project still
 Capture overhead and other indirect costs attractive in this scenario?

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 63

 Once you have a baseline Financial Model - it
can be used as a tool to answer key questions,
Using the such as:
• Can I cover my full costs with expected revenue?
Financial
• How much total revenue is needed to fully support
Model as a program costs (i.e., breakeven)?
Tool • How much revenue per unit of service is needed
to fully support program costs (i.e., breakeven)?
• What happens if my labor costs increase 10%?
• Which factors have the biggest impact on financial
performance (i.e., need to be monitored most
closely during implementation)

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 64

Example 1: Financial Model Analysis
A local smoothie shop permanently closes leaving its patrons in need a convenient replacement. You
believe if you include higher-quality ingredients and advertise well, you can attract this crowd.
Marketing costs $250 per quarter and it now costs you $3 per glass served but you can sell them for
$5 each. You expect to serve 5 clients a day initially with this increasing by 1 client/day for every
quarter in operation but with no summer boost. How does your first year look now?
Q1 Q2 Q3 Q4 Total
Revenue $2250 $2700 $3150 $3600 $11700
Clients Served 450 540 630 720 2340
Expenses
Variable Costs (these should $1350 $1620 $1890 $2160 $7020
change as output changes)
Fixed Costs (these should stay $1500 $500 $500 $500 $3000
consistent as output changes)
Net Change ($600) $580 $760 $940 $1680

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 65

Example 2: Financial Model Analysis
Your high-quality ingredient lemonade stand was successfully launched and grew as expected in the
first half of the year. However, your success has attracted many imitators that started up in the 2nd
half of the year. You’ve found your marketing costs have doubled to compete for ad space and you
had lower prices to $4/glass to keep your customer base in this crowded market. How has this
changed how much you have raised for charity at the end of the year?
Q1 Q2 Q3 Q4 Total
Revenue $2250 $2700 $2520 $2880 $10350
Clients Served 450 540 630 720 2340
Expenses
Variable Costs (these should $1350 $1620 $1890 $2160 $7020
change as output changes)
Fixed Costs (these should stay $1500 $500 $750 $750 $3500
consistent as output changes)
Net Change ($600) $580 ($120) ($30) ($170)

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 66

Module 4 Group Exercise

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 67

Small Group Discussion: Financial Analysis

Scenario: You receive a $200,000 grant to launch your new

Directions
program with the goal of transitioning to an earned revenue
stream after the grant is depleted.
• 20 minutes: Within
Discussion Questions:
your tables, discuss
the questions
 How long can you cover program expenses with this grant?
What strategies could you use to maximize the time this grant below
can be used?
 When operating at full capacity of 400 clients, what earned • Identify a notetaker
revenue per client is needed to break even financially? and prepare to
 What factors have the greatest influence on your ability to present 2-3
operate this new program as a breakeven earned revenue minutes summary
program? of key themes and
recommendation
Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 68
2:45 – 3:00 Putting It All Together

Nonprofit
Nonprofit Healthcare
Healthcare Academy
Academy | [FINANCE
| Financial Workshop]
Resiliency | [DATE
Workshop 2025] 2025
| January 69
NPHA Financial Resiliency Deliverable

By March 6th, each organization will update and refine their

responses to the end of module group exercises and submit to
CalOptima

Questions and clarifications can be addressed during 1:1 TA

sessions scheduled through the end of February

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 70

15 Minute Break

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025

71
Making Your Case with Confidence
and Clarity

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025 72

 Hello
my name is
Susette
Aguiar Professional Training LLC
 Today’s Session

Communication Active Empathetic Customize and

Objective(s) Listening Communication Connect
What are some reasons you
communicate with others?
Persuade them to Interview them to join
donate to your cause your team

Learn information from

Inform them of the them so that you can
services provided by create new programs,
your organization make decisions, or develop
new skills
Know Thyself
 Know your
objective for the
communication

1b) Do you want 2) What do you

1) What do you
to inform, want the
want from this
persuade, learn, audience to
communication?
connect? learn?

3) What do you 5) What can YOU

4) What does the
want the learn from the
audience want
audience to audience?
to learn?
feel?
 What’s
your point,
Mr. Potter?
Super Communication
Active Listening
Active Listening
Superpowers Kryptonite
 Paraphrase  Make assumptions
 Confront your bias—ask yourself  Be Defensive/Out to Prove
what is this about for you?
 Assume Negative Intent
 Watch body language
 Ignore Emotional State
 Picture, hear, feel
 Ignore Physical Needs
 Be here to hear
 Rush It
 Open mind - What is this about for
them?  Allow Distractions/Mind Wandering
 Wait! Comment and/or Ask
What are some of your
communication pet-peeves
(annoyances)?
Know Your Audience
Emotional Intelligence
© Can Stock Photo Inc./karandaev
Say What You Need to Say
Information Distribution:
What, Who, Why, When, Where, How Thinkers,
Feelers,
Customize Messages:
 Visual, Auditory, Kinesthetic/Tactile
In-Betweeners
 Word Choice (formal, informal)
 Body Language and Tone
 Objective and Pause
Read all about it – it’s not just for newspapers!
HEADLINE
I’d like to talk to you about why the project timeline should change.

Point #1 Point #2 Point #3

Tagline
How do you see the situation? What’s the next step?
 Points

Headline
Activity
 Activity

Instructions for
**Activity*

real-world scenario script

Activity*
What makes you feel
confident when you are
communicating?
 Applying What You Learned

How will you

intentionally apply two
strategies from today’s
session to get better
results?
“You never really understand a person until
you consider things from his point of
view…until you climb into his skin and walk
around in it.” Gregory Peck as
Atticus Finch in
To Kill a Mockingbird
by Harper Lee
Questions or
Take-aways?
THANK YOU!
 • We will meet again on March 4th to celebrate
your graduation!

• Please fill out survey and provide feedback!

Wrap Up &
Next Steps

Nonprofit Healthcare Academy | Financial Resiliency Workshop | January 2025